SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

Reportable segment results as of and for the years ended December 31, 2017, 2016 and 2015 are presented below.


	Illinois				Other and		Elimination
	Basin		Appalachia		Corporate		(1)		Consolidated
	(in thousands)
Year Ended December 31, 2017

Revenues - Outside	$	1,059,381	$	623,720	$	112,740	$	—	$	1,795,841
Revenues - Intercompany		56,097		2,321		15,924		(74,342)		—
Total revenues (2)		1,115,478		626,041		128,664		(74,342)		1,795,841

Segment Adjusted EBITDA Expense (3)		688,468		385,802		83,490		(65,573)		1,092,187
Segment Adjusted EBITDA (4)		391,426		234,124		65,431		(8,769)		682,212
Total assets		1,429,078		470,892		508,317		(187,036)		2,221,251
Capital expenditures		94,252		48,358		2,478		—		145,088

Year Ended December 31, 2016

Revenues - Outside	$	1,275,543	$	541,108	$	114,372	$	—	$	1,931,023
Revenues - Intercompany		61,617		3,806		17,752		(83,175)		—
Total revenues (2)		1,337,160		544,914		132,124		(83,175)		1,931,023

Segment Adjusted EBITDA Expense (3)		761,644		346,712		89,594		(72,313)		1,125,637
Segment Adjusted EBITDA (4)		552,284		191,487		45,909		(10,862)		778,818
Total assets		1,460,924		480,745		408,798		(152,780)		2,197,687
Capital expenditures (5)		52,505		36,213		2,338		—		91,056

Year Ended December 31, 2015

Revenues - Outside	$	1,527,596	$	584,962	$	160,753	$	—	$	2,273,311
Revenues - Intercompany		108,621		11,337		19,869		(139,827)		—
Total revenues (2)		1,636,217		596,299		180,622		(139,827)		2,273,311

Segment Adjusted EBITDA Expense (3)		961,611		398,071		153,720		(127,247)		1,386,155
Segment Adjusted EBITDA (4)		604,808		186,518		25,767		(12,580)		804,513
Total assets		1,694,044		517,972		269,047		(114,547)		2,366,516
Capital expenditures (5)		145,352		61,279		6,166		—		212,797

(1)

The elimination column represents the elimination of intercompany transactions and is primarily comprised of sales from the Matrix Group and MAC to the ARLP Partnership's mining operations, coal sales and purchases between operations within different segments, sales of receivables to AROP Funding and insurance premiums paid to Wildcat Insurance.

(2)

Revenues included in the Other and Corporate column are primarily attributable to the Matrix Group revenues, Mt. Vernon transloading revenues, administrative service revenues from affiliates, MAC revenues, Wildcat Insurance revenues and brokerage coal sales.

(3)

Segment Adjusted EBITDA Expense includes operating expenses, coal purchases and other income. Transportation expenses are excluded as these expenses are passed through to the ARLP Partnership's customers and consequently it does not realize any gain or loss on transportation revenues. We review Segment Adjusted EBITDA Expense per ton for cost trends. Results presented for Segment Adjusted EBITDA Expense for the years ended December 31, 2016 and 2015 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization).

The following is a reconciliation of consolidated Segment Adjusted EBITDA Expense to Operating expenses (excluding depreciation, depletion and amortization):


	Year Ended December 31,
	2017		2016		2015
	(in thousands)
Segment Adjusted EBITDA Expense	$	1,092,187	$	1,125,637	$	1,386,155
Outside coal purchases		—		(1,514)		(327)
Other income		2,980		725		955
Operating expenses (excluding depreciation, depletion and amortization)	$	1,095,167	$	1,124,848	$	1,386,783

(4)

Segment Adjusted EBITDA is defined as net income (prior to the allocation of noncontrolling interest) before net interest expense, income taxes, depreciation, depletion and amortization, asset impairment, net acquisition gain, debt extinguishment loss and general and administrative expenses. Management therefore is able to focus solely on the evaluation of segment operating profitability as it relates to the ARLP Partnership's revenues and operating expenses, which are primarily controlled by our segments. Results presented for Segment Adjusted EBITDA for the years ended December 31, 2016 and 2015 have been recast to reflect a reclassification of depreciation and depletion capitalized into coal inventory as adjustments to Depreciation, depletion and amortization rather than Operating expenses (excluding depreciation, depletion and amortization). Consolidated Segment Adjusted EBITDA is reconciled to net income as follows:


	Year Ended December 31,
	2017		2016		2015
	(in thousands)

Consolidated Segment Adjusted EBITDA	$	682,212	$	778,818	$	804,513
General and administrative		(63,331)		(75,087)		(69,076)
Depreciation, depletion and amortization		(268,981)		(336,509)		(323,983)
Asset impairment		—		—		(100,130)
Interest expense, net		(39,283)		(30,655)		(29,693)
Acquisition gain, net		—		—		22,548
Debt extinguishment loss		(8,148)		—		—
Income tax (expense) benefit		(211)		(14)		(21)
Net income	$	302,258	$	336,553	$	304,158

(5)

Capital expenditures shown above exclude the Hamilton Acquisition on July 31, 2015, the Patriot acquisition on February 3, 2015, the MAC acquisition on January 1, 2015 and the payment for acquisition of customer contracts in 2016 (see consolidated statements of cash flows).

Reconciliation of consolidated Segment Adjusted EBITDA Expense to operating expenses (excluding depreciation, depletion and amortization)


	Year Ended December 31,
	2017		2016		2015
	(in thousands)
Segment Adjusted EBITDA Expense	$	1,092,187	$	1,125,637	$	1,386,155
Outside coal purchases		—		(1,514)		(327)
Other income		2,980		725		955
Operating expenses (excluding depreciation, depletion and amortization)	$	1,095,167	$	1,124,848	$	1,386,783

Reconciliation of consolidated Segment Adjusted EBITDA to net income


	Year Ended December 31,
	2017		2016		2015
	(in thousands)

Consolidated Segment Adjusted EBITDA	$	682,212	$	778,818	$	804,513
General and administrative		(63,331)		(75,087)		(69,076)
Depreciation, depletion and amortization		(268,981)		(336,509)		(323,983)
Asset impairment		—		—		(100,130)
Interest expense, net		(39,283)		(30,655)		(29,693)
Acquisition gain, net		—		—		22,548
Debt extinguishment loss		(8,148)		—		—
Income tax (expense) benefit		(211)		(14)		(21)
Net income	$	302,258	$	336,553	$	304,158